5 tips: taking the sting out of health insurance premiums.

Author:Schafer, Jim
Position:Health Care Trends
 
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It's no secret: the cost of providing health insurance benefits is high enough to give everyone headaches-not to mention straining business budgets and employees' paychecks. Rather than battle the insurance blues, however, there are a number of ways to trim costs.

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Wellness Incentives

Companies that offer wellness programs give employees incentives to reach a number of lifestyle goals, such as quitting smoking, losing weight and exercising more. The logic behind these programs is simple: Healthy employees don't call in sick as often, are more productive and spend less on healthcare, which means lower premiums.

Employee Cost-sharing

Many companies share the costs of benefits with employees. In addition to paying a portion of their health insurance premiums, most employees make additional payments when using healthcare services. The three most common mechanisms of cost-sharing involve co-payments, co-insurance and high deductibles. Increasing the amounts of any of these variables will decrease overall premium costs.

Flexible Spending Accounts (FSAs)

An FSA is a medical expense reimbursement program that allows a worker to set aside funds for medical expenses on a pretax basis. The employee must decide in advance how much he or she wants to set aside, typically basing the amount on his or her previous year's expenses. Any amount that is not used up by the end of the year is forfeited.

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